The Number One Rule For Stock Market Investing

Some of you may be filled with fear about the stock market right now, but your main concern should be preserving your capital. This stock investment advice should help you keep the money you have during this down stock market while you are trying to make returns on your investments. Find out how you can protect your capital from the thieving bear market. We have many more Stock Market Investing Articles Now Available.

If you are putting on new positions or have old ones that are losing their value, put a stop limit on each position. Although it’s not a wonderful thought, you need to decide how much you are willing to lose before you buy any stock. Generally anywhere from 5% to 10% is a good limit to put on your investment losses. That brings us to the:

Number One Rule for Stock Market Investing:

1. Don’t lose money!

I know it sounds obvious, but many investors lose focus of keeping losses to a minimum. That simple rule can mean the difference between a great investor and terrible investor. Keeping investment losses as minimal as possible will allow you to win big on the trades that go your way. Losing trades or investments usually continue to be losing trades or investments.

Even top hedge fund managers like in Schwager’s Stock Market Wizards book repeat how important cutting your losses on trades is. If you can’t cut losers, you will never win in investing. Everyone makes bad trades, but good investors don’t let them eat up their capital.

Once you change your investing strategy to have a stronger emphasis on limiting losses, the big gains will come sooner than you expect! We have many more Investing Help Articles Now Available.